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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Detroit 17, Us 12, U.s. 10, Mr. Orr 6, Goldman Sachs 5, Kudlow 5, Snyder 5, Kevin Orr 5, Washington 4, Rick Snyder 3, Rachel 3, Schwab 3, Don 3, Kayla 3, Texas 3, Don Lufkin 2, Larry Kudlow 2, Marco Rubio 2, Steve Mcmahon 2, T. Rowe 2,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    March 14, 2013
    7:00 - 8:00pm EDT  

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is connecting today's leading companies to places beyond it. siemens. answers. tomorrow. there tomorrow. there is a bull market somewhere. i promise to try to find it. i'm jim cramer, i will see you tomorrow. good evening, everyone. i'm larry kudlow. this is "the kudlow report." make it ten straight days of gains for the douw. dow up 83 points to a new record high. s & p finishing just shy of a new record high and i'm make the case that a strong dollar goes hand in hand with a strong stock market and rising investment returns in the economy. but it's not all good news out there. detroit, take a look at the new man in charge of your money. governor rick snyder naming kevin orr as emergency manager
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for the financially distressed city. i think bankruptcy and busted union contracts are the only answers, i will speak to the kwov nor and mr. orr about their chances and president obama, very interesting things to tell republican senators this afternoon. he says he's for corporate tax reform and willing to push fellow democrats on entitlements. is the charm offensive starting to pay off? "the kudlow report" begins right now. first up tonight, a nice 83-point move higher for the dow, makes it ten straight days of gains. we have details of another day of record highs, good evening, ka kayla. >> reporter: jobless claims fell unexpectedly and gave traders more confidence in growth. the dow sitting above 14,500. up 83 points to 14,539. this month the dow has been up nearly every single day.
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the s & p within four points. all time record closing here. 1,563. on rising rates on treasuries. the highest yield in a year. low by historical standard. 3.248%. and the year on 390-year, up 10% this month alone. lots moving on the mobile front, larry. google will shut down its e-reader and samsung unveiled galaxy 4. blackberry moved on moves of the z-10. closed down just 4%. jcpenney under the microscope. the credit default swaps, those widened dramatically. fears of liquidity crunch hurting the stock, closed the day down more than 1.5%. larry. >> many thanks, kayla. strong king dollar, strong stock market rally.
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stronger in vestment returns for the u.s. economy. these are some of my themes. things better than you think. i want to do a kudlow 101, quick one tonight. let's get this thing back. this is year-to-date. dollar up, about 3%. the dow is up about 11% and you can see just how they have been moving together very, very nicely. now, i just want to make a couple of quick points. i know it's only year-to-date. we are just talking 3% on the greenback and 11% on the dow. dow is terrific. it reminds me a little bit of the 1980s and much of the 1990s, when the dollar went up, stocks went up and the economy was strong. i call it a growth trade. no one should fear a stronger dollar. heck it will keep down oil and gasoline prices and inflation and help then consumer and help business. a stable, king dollar going with some pro-growth policies may be coming out of washington. the point i want to make it's
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business, profits and cash flow have given people confidence. and finally before i speak with my distinguished guest, i want to say this. i actually believe the dollar rally has something to do with the budget cuts from the so-called sequester in washington, d.c. we made a little progress on america's bankrupt fiscal finances. let's turn to my pal, market pro done luskin, macro chief investment officers, and kayla also with us. strong dollar, stronger economy, what's your take? >> i'm waiting to hear the real story behind this growth thing that are you talking about. i know there was this thing in january called the american taxpayer relief act that gave no relief to any american taxpayer that raised taxes on any american taxpayer. 1%, 99%. wages, dividends, capital gains. what about that reminds you much the '80s? >> not good. but not near as bad. here is one key point. everyone talking about the
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higher payroll tax. i don't believe that's much of a factor. you know why? the lower payroll tax was a rebate, temporary, people didn't spend. they will not not spend now. look at the retail sales number. the keynesian view of the payro payro payroll tax, not happening. >> people have been leaving the labor force for a dozen years. take home pay went down 2% because of the end of the payroll tax holiday versus the year before and the year before that. people falling out of the labor force, and you think they are coming back when you are paying 2% less? that's a supply side argument. >> i know the participation rate is too low. i think there is a lot of issues here, including all the people who are going to retire. they are not coming back into the labor force, and the peek of the female participation rate is over. >> i am participating.
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you have to carry the whole ball. my generation is not. >> payroll tax is interesting, it hasn't been around forever. we talk about it as this entire wall of spending that's come crashing down. we existed before the payroll tax, we existed after that the dollar is an interesting indicator to watch. it's hard to trade the dollar if you don't have another currency on the other side. the dollar has moved in sight spite of itself in spite of what's going on in washington. euro dropped to a three-month low because of more austerity fears. germany will balance budget earlier than expected. the there are moving in spite of itself. >> people are trying to get into the stock market. that's why the dollar is going up. you know why? it is possible. it is possible that instead of 1 to 2 growth in the economy, we may be moving to 2.5%, i have seen estimates of 3% growth in the economy. those retail sales, those jobless claims, those isns, and
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those business profits, i was at the business roundtable with the coos, profits, cash flows, pristine balance sheets, the u.s. is the place to be right now. that's why the dollar is strong. a growth trade. >> then why is the u.s. underperforming so many of the world's stock markets this year? it's behind japan, behind the uk. on a capitalization weighted basis, the u.s. is underperforming the morgan stanley world index x-us. >> volatility is also underperforming. if you put money to work in those marks, you have to accept volatility is higher based on recent trends. >> give it time. the japanese thing is terrific. >> a strong dollar, they are deliberately trying to weaken the yen. >> japan is fighting deflation, and they are preappreciating the currency and will start pouring money into the economy. that's exactly right. may help bolster the dollar, but i don't see why japan and the
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american stock marks can't go up. i can't vouch for britain or europe. european central bank is too tight and needs to ease more. i want to tell you this. this is a growth trade. do not fear. i hear people say a strong dollar will wreck profits because it hurts. >> that's baloney. >> that's just baloney, nonsense. probably 20% or 30% away from that remotely. we will come back and talk to you. kayla, best of the best, and don, thank you. coming up, an emergency manager for detroit. can the city be saved by anyone? is detroit going bankrupt? the interview with governor snyder and the man he chose to fix detroit, coming right up. and later, president obama tells senate republicans he's on their side when it comes to corporate tax reform and even
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entitlements. whoa! can we believe this? hope springs eternal. i'm an optimist. a report on what happened on capitol hill today, and don't forget, folks. whether it's detroit or federal policies, free market capitalism is the best path to prosperity if we do those, we'll soar on kudlow. we'll be right back. come on, nowadays lots of people go by themselves. no they don't. hey son. have fun tonight. ♪ ♪ back against the wall ♪ ain't nothin to me ♪ ain't nothin to me [ crowd murmurs ] hey! ♪ [ howls ]
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♪ ♪ that's that's the beginning, just one of the clues ♪ ♪ you've had your first lesson in learning the blues ♪ >> call it motown blues. facing a $327 million budget deficit and more than 14 billion in long-term debt, the city of detroit now under state control today. michigan's republican governor rick snyder appointed an official emergency manager to take over the city's ailing finances, but will he be able to prevent the largest municipal bankruptcy in u.s. history. all right. joining us now for a business news exclusive. we welcome back michigan republican governor rick snyder and detroit's new emergency manager, kevin orr, thank you, chairman, we appreciate it governor snyder, is detroit
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going into bankruptcy? >> that's not the objective, larry. the objective, better services to citizens, financial stability and grow the city of detroit. one of the tools in the too many box could be bankruptcy. that's not the place to go to start the constitution, and one of the things i'm excited about, is getting kevin orr on board. one of the best in the country on? this field. a top person to come do the work. i'm excited to have him join the team. it's about all hands on deck, including the mayor, hopefully the city council, will work together to solve the problems. >> mayor, mr. orr, welcome. your reputation as a great bankruptcy lawyer precedes you. i wanted to ask, how tough will you have to be? talking salaries, talking pensions, talking health care benefits, how much will you have to cut to get this job done out of bankruptcy? >> well, hello, larry. and thank you for that compliment. the really is, larry, this is going to be a data-driven
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process. i had get boots on the ground. governor's team will do their analysis, and hopefully not just the mayor who stepped up, but members of the city council to take a look at everything. everything is on the table. the good thing about this is, everyone agrees, a financial emergency. everyone agrees something needs to be done about it. so the only thing really left to do is to do something about it. the question is, how do we do it? i'd like to do it cleejialy, consensually and quickly. >> you know it won't happen. you are a great bankruptcy lawyer. that's your reputation. >> thank you. >> i'm an admirer of dave bing, the detroit city council, impossible, they can't get anything done, that's why you are in the fix you're in. look, you will have to break all the union contracts? aren't you? let's start there. >> not necessarily, larry. your own city, new york, as well as philadelphia, came through a restructuring and didn't have to file for bankruptcy.
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cities like pittsburgh and baltimore had financial crises. >> mr. orr. i was around. they broke the contracts. >> i don't know if you have to break them. you have to look at them and do an analysis of what needs to be adjusted. >> governor snyder, i guess i ask you the same question. how far this has to go. i respect mr. orr. a great reputation this is a brutal political financial story. all right, governor. have you become a right to work state. i want to ask you, if these contracts have to be broken as i believe and i'm not alone in believing that, are you going to go after union privileges. will you have to go after collective bargaining so that this fix can never happen again? >> well, again, larry, i believe in collective bargaining. freedom to work is a separate issue and it's one of the things that many respects the city has done on a number of things with labor contracts already and i appreciate a number of labor people proactive trying to work through these things, this isn't
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a management labor question. this is about everyone in detroit coming together to solve problems and the starting point is not to look for conflict, but to look for common ground solutions in a positive way. the key here is, this has been 50 years in the making and been many failed attempts, we'll get it done, get it done right this time, trying to work with as many people on positive solutions as we can. it's about growing detroit. >> great rhetoric, sir. and i'm an admirer of yours. if this could have been collegially, it would have been done. that's why you had to bring in mr. orr. you didn't want to do it you had to do it. it's a sensible thing to do. governor, where is the money going to come from? short 327 million. i don't know if that's the right number. 14 million in debt. where is the money going to come if you don't break contracts and don't have across the board large cuts in salaries, pensions and health care? where is the dough going to come from? >> not about bailing out
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detroit. that's not the solution. the solution, long-term stability, about asking people to come to the table and understanding their shared sacrifice and we'll work through with this with fundamentals. there needs to be better services to citizens and not just about cutting things. you can reduce costs and provide better service at the same time. they are not mutually exclusive. >> i appreciate that. >> and i view it, the city has been challenged and we have a top flight resource with an additional set of tools to come to bear and we'll get the job done in a constructive way. >> not even the magic of kevin orr will solve this with just productivity increases. you know that, i know that, and we're talking major slashes of dollars and cents. let me go on to one last thing, mr. orr. no stranger to the financial world. bankers made a lot of money off detroit selling bonds, probably with terrible credit analysis. okay? who is it? bank of america, merrill, under one roof.
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jpmorgan, selling with -- if i get this right, $4 billion worth of bonds, collecting $474 million worth of fees, what the hell did the bankers tell the investors? how do you sell a city going downhill for 50 years as governor snyder just said? >> well, you know, larry, the good thing about this question was i wasn't here. i was safely ensconced in my practice, and quite frankly, i'm not interested what happened behind me. i'm looking forward, the reality is, bankers are remarkably sophisticated folks, they know the numbers, see the cash flow. other numbers at place, regarding efficiencies, realization, profitability, and other city services and as long as there is a net benefit to the city that might be able to get rationalized, cashiering, collecting more efficiently. a lot of opportunities short of breaking contracts and blaming the bankers. they to be perfectly honest
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about it, everything on the table, including debt service. >> you got it, sir. they hustled everybody with lousy credit, and people can see this coming, bankers ought to make paybacks. kevin orr, are you very kind to come on. >> thank you very much. >> governor snyder, i thank you again. >> great to be with you, larry. >> all right, take care. >> smiling faces. let's see if they do in a couple of weeks. let's bring in the panel for the evening. steve mcmahon, and don luskin and jim petralukis. is it conceivable, remotely possible they won't break the contracts and slash all salaries, pensions, and health care benefits? >> listen they have a huge gap to close. $14 billion unfunded liabilities. that's the easiest part of the. the easiest part going in, cutting salaries, breaking
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contracts. that will stabilize detroit. how will you grow it? how will the city flourish, not just muddling along? not a place a lot of people would want to live? how do you grow detroit? >> how about cutting the staff, the union staff and the city government by 50% and using some of those savings to pay off the debt and start cutting tax rates. let's make detroit a tax-free zone. jimmy talked about that earlier. detroit should be the hong kong of the midwest. he's absolutely right. how about that? democrats have screwed everything up. >> just blame the bankers. this is what happens when bankers run roughshod over folks putting up the money. jim's idea is a good one. the idea of a tax-free zone, creating a hong kong environment of growth, is a great idea. asking people who make sacrifices what are counting on
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pensions, taking those things away from those folks is pretty unfair. >> they bankrupt the city. >> they didn't bankrupt the city. >> this is like wisconsin, indiana, like ohio. >> the workers -- >> the worker's paradise of detroit. unionized worker's paradise bankrupted the city. >> workers did nothing but trust union officials to negotiate deals. >> they sit around the same table, say the same thing, elected officials work for the unions. >> blame banks, political leadership, even perhaps some union officials. >> one cheap shot. these bonds that the bankers sold, these bonds that these goofy bankers sold, the subprime version of municipal finance is it not? i give you the last word quickly? >> of course it is. and how about the goofy investors who bought it? they relied on some goofy rating agency. this is a ship of fools, larry. >> i hope so. >> blaming the workers and taking away their pension, what
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they worked their whole lives for is absolutely unfair. >> we won't get anywhere with tax subsidies that work -- >> i got to get out of here. i got to get out. >> not the workers, just the unions. but the two are synonymous in detroit. two of the biggest wall street names get flagged in the stress test. kayla joins us with the full story. ♪
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now, now, let's put it this way. today was not a great day to be an investment bank. cnbc's kayla tau snsche rejoins. >> the second wave of stress tests. mandated by don frank. every bank holding company above $50 billion in assets had to participate. most notably beyond the headlines, investment banks feared the worst of all the big investment banks. morgan stanley and goldman sachs near the bottom. today, when we got the formal ratios, including what the bank planned to pay to shareholder, we again saw morgan stanley and goldman sachs near the bottom. jpmorgan chase far behind. the fed said only conditionally approved jpmorgan and goldman
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sachs because they wanted them to improve the way that they were planning to distribute this capital, because they weren't planning for the risks that were as steep as the fed planned. when you look at numbers, what does that mean? how much of a capital buffer, larry, do banks have in terms of boosting what they have in the portfolios. you look at the list, you see the big banks that have less of an exposure to investment banking or the overall-pro file of the bank. toward the top, faring better and this will bring back the debate as far as should the big banks be broken up? i don't think they should. the bigger you are, the lest investment banking you have the safer the fed says you are. >> this will be a hell of a debate. morgan stanley, goldman sachs, jpmorgan. did they not provide all of the necessary information? >> they did. they did. >> they did or did not? >> they did provide the necessary information, but what happened is the banks ran their
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own internal model as far as what a stressed depression era situation would look like. the fed ran its own, and ultimately the bar at the fed proven to be higher, but the fed said goldman sachs and jpmorgan, we want to introduce the scrutiny of tests and we feel like rumor prepared for scenarios, and the fed said banks with private equity with trading, deprivilegeities, your honor harsher scrutiny. why do you want the banks to stand alone? >> as they should. we'll see what happens. kayla, thank you very much. my dreaming, or is president obama really telling senate republicans he's for corporate tax reform, for growth? we'll get to the bottom on this on "kudlow." i know what you're thinking...
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welcome welcome back to "the kudlow report." two sizzling politic stories tonight. the obama made a return to the senate for a meeting with the gop senate conference. first time in two years, outside the nation's capital, c-pac conservatives began their
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conference, perhaps as a prelude to 2016. let's bring in cnbc contributor robert kosta. he'll join us with the latest. let's start with the fireworks at c-pac? who was the hottest pistol? >> senator rand paul of kentucky. got the libertarians at c-pac excited. marco rubio gave a big speech about american exceptionalism. >> what did rand paul say? he is still talking about drones, but took some good pot shots at the republican party. >> he did said the republican party has to change and trying to lead the change on foreign policy, talking about smaller foreign policy, less foreign intervention, but he really got conservatives excited, talking about reform, and a lot of people in the party are not eager to reform the party at all. >> any question in your mind, he's a presidential candidate? >> i spoke with rand paul over breakfast earlier this week, and he hasn't announced for anything, but it seems like he'll be heading to iowa and new hampshire pretty soon. >> did marco rubio talk about
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immigration? what did he talk about? >> he stayed away from immigration, which i found surprising and had a big picture theme in his speech. talking about how the republican party has great principals and time for the party to return to principles and not too concerned in the post-romney era. >> robert, stay with us, please. joining us, north dakota senator john holvin. he was in the obama meeting and still with us, steve, jim, and don. thank you very much. let me just start out, a lot of things, rumors in the air. was pressure put on the president about the keystone pipeline, senator? >> definitely. i pressed the issue with him. talked to him about it last week, and again today, and asked both that he approve it, and give us a timeline on which he will make a decision. he is still saying he may take the whole year, been five years already, and to take another
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year, make it six years, too long. he needs to make a decision. >> the press secretary confused everybody today by making a statement that sort of suggested it was the state department's decision to make. it's in their house. doesn't the president have to eventually sign a document to put it through? >> it's the president's decision to make. he can delegate if he wants. it's been made clear to me. i talked with secretary kerry as well. a 45-day comment period, but he hasn't told us when he will make that decision. and i've introduced bipartisan legislation with senator max back us of montana to approve the project congressally. >> senator, what do you think? does the president want something in exchange for keystone? some say he wants revival of cap and trade? or is he just looking on the
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bill on the merits? >> my sense, he hasn't made up his mind. a number of different issues that he felt were problems or barriers. we've covered all of those. the latest report shows that there will be less groan house gas emissions with the project than without. we've rerouted the project, every state has given consent. but he's run out of excuses. but he's still wrestling what he is going to do. >> senator, a lot of talk on various blog sites, websites, that the president game out for corporate tax reform. nothing in my mumle opinion would be better for economic growth than corporate tax reform, including repatriating taxes through a territorial system. what do you make of obama and corporate taxes? >> we absolutely need pro growth tax reform. that's how we'll get the economy growing.
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he indicated a willingness to engage in tax reform, but still wants net higher taxes to get revenue, rather than getting revenue from economic growth. and that is a bridge that we have to get across with him in terms of getting him to understand that to get the economy growing, you can't keep raising taxes and we pushed that point very hard with him today. >> senator hoeven, didn't the president come forward with a trillion in cuts and $700 billion in tax increases that he's proposing in a way that he said would do this with balance. speaker boehner in 2011 said he was going to get the house to approve a trillion dollars in tax increases and so far $600 billion or so has been approved in the last round. where does this go from here? >> clearly has not demonstrated a trillion in cuts. i have not seen that. asking for $600 billion in additional tax increases, and i
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and others pointed out, we just provided. he got $600 billion in tax increases with the fiscal cliff with no reforms and we're talking about reforms to medicare like doing means testing where you upper income people providing copays or higher deductibles and finding where he is willing to make reforms and additional deductions. >> senator, thank you very much. we appreciate your updates. let me go to my pal, robert costas. president obama told republican senators, he, obama, would persuade the democrats for entitlement reform so long as republicans can persuade themselves for higher revenues. what do you make of that? >> i think the buzz is real. i was working my senate sources this afternoon. i was surprised to hear about entitlement reform. they came out of meeting really positive. they think as the president looks ahead to his own legacy,
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he wants to craft some kind of small grand bargain on entitlements, on social security or medicare. >> don, as a professional investor, what do you want to hear from this? within political boundaries? >> it's what i don't want to hear, larry. i want to hear people stop talking about this grand bargain. it is a windmill, a trap. you go into that office in the white house and have another merlot summit. it's all going to be revenues, revenues, revenues, tiny entitlement reform out 30 years and mostly taking away entitlements from a few wealthy people. it's nothing. it's lies. when are we going to admit it? conservatives and libertarians have to win an election, get into power and do this themselves. >> that's it. they have to win an election, and until they do, they have to deal with this president and the this democratic congress.
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>> they don't have to deal with them. >> why do they have to? >> what cliff? >> gentlemen, remember politics of all of this. one of the reasons i hear from senators, why the president is open to entitlement reform. he sees it as a way to get new revenue and taxes. if he baits the republicans and maybe gets them to agree, he maybe gets some revenues are real quick, is that going to happen? is that going to happen? the given op buy that deal? >> i thinks republicans are such a corner that they want to make democrats happy. >> they it in a worst way, that's how they'll get it. not fundamental title reform. the cpi thing, sort of a tax increase. >> don may be right. a grand design is going to be a bad thing for the pro growth forces. >> that's right and such
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dissension, and more tax increases for something that's not fundamental. >> jimmy this is politics, this is what republicans are realizing. they lost two straight elections. we will continue to rail against obama? >> we increased our way back to power. >> before the last fiscal crisis, if we raise taxes to 39%, if payroll taxes go over the cliff, what's happened? a lot of people sitting around. >> i didn't like the tax hike. >> what's happened. the stock market is up 10%. we were just talking about it. the president comes forward with serious, significant cuts in entitlement programs, medicare, medicaid. >> no. >> excuse me. >> what serious cuts? >> look up the word series in the dictionary. >> open to chained cpi and social security. >> what tax increase? >> that's a good point. the president is more open than senate democrats. >> he wants to cheat doctors and
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hospitals and hmos. >> completely unstainable. phony cuts. >> they save real money, how are they phony cuts? >> they won't accept medicare. >> and robert, what you got? >> larry, have you been bringing this up for a while. obama's positioned himself to the senate of the senate democrat's budget. very interesting that the president walking to capitol hill for the third straight afternoon and talking about entitlement reform behind closed doors. >> all i'll tell you -- >> would you believe him? this is the opposite of what he has been saying for the last five years. come on. >> i understand. he is, however, to the right of the senate democrats, which is really a wacko place. all i want to say is this. if -- if mr. obama, president obama wants to legitimately go for a legitimate corporate tax reform, lower the rate, broaden the base and give a break to repatriated foreigners, i will back him to the hilt.
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i moderated a panel yesterday, i will say it again, one thing i hear from ceosory and over and over, lower the tax rate. >> we have a grand bargain for that. >> it will never happen. >> i'm just saying, if you want to see kudlow back, president obama, corporate tax reform will do it every time. gentlemen, thank you very much. up next, can uncle sam be spying on and you your bank accounts? a new report says if the obama administration gets its way, they will soon. joined by the attorney general of texas who is expressing his outrage next up on "kudlow." tdd#: 1-800-345-2550 seems like etfs are everywhere these days. tdd#: 1-800-345-2550 but there is one source with a wealth of etf knowledge
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are u.s. spy agencies keeping a close watch on your bank accounts? if the obama administration gets its way, they will be. the white house is drawing up plans to give all u.s. spy agencies full access to a massive database that contains data on all u.s. citizens. joining us to talk about this is texas attorney general greg abbott who has concerned about the proposal. still on cell with me, steve
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mccann, jim petrikoukas and don lufkin. >> good to be back with you, larry. i'm deeply troubled out of a trend imposed by the federal government. largely, a concern about the erosion of constitutional protections and legal protections, but more specifically here, we're seeing the expansion of the federal government seeking more documents, more access, into our records, here in particular, banking records, and a very troubling way that i call this the black hole law. because what the federal government is doing, expanding the size and scope of the black hole of information of your banking records that they will be able to access across the board exposing people to even further threats. the biggest problem is what we're dealing with here this law, this proposed rule coming out of the treasury is creating more questions than answers. >> we don't know what the limits
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are. the way the deal works, greg, as i understand it, the treasury department does have the authorities when banks, let me make this clear, banks report what is called suspicious customer activity. now, you tell me. as i understand it now, the cia, nsa, intelligence agency, they can go right into the banks themselves? is that what we're talking about? >> first, you need to understand the scope of information that is provided by banks is far larger than most people think. because banks overcomply here, and it's going to provide access to the fbi to basically all law enforcement agencies now, which includes the cia, nsa, so many others, but also, larry, what is indisclosed. my concern that this information can be shared not just with law enforcement agencies here in the country, but your personal records can be exposed worldwide and people can be falsely accused of being involved in some kind of terrorism scheme without ever being afforded
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their due process rights. >> any limits to this at all, mr. abbott? any limitations to this as far as we know? >> you are hitting the nail on the head about one of my concerns, which there seems to be an erosion of any limitations on this, and that's the biggest question. there used to be a gate keeper here, larry. what is being proposed is the removal of the gate keeper so you would have reduced limitations and greater access to people's private records. >> general abbott. >> yes. >> this was brought about by the patriot act which president bush was a big supporter of. do you feel like this is a washington problem or suggesting that this is somehow a democratic administration problem? >> there this is a problem for years, but it's worsened consistently when we've seen this administration erode constitutional protections and act as though people don't have legal rights. the easy recent example, of course, what happened with regard to the drone situation,
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where supposedly the administration talking about being able to kill americans on their own soil. here we see the very same thing with regard to exposing american's records to more law enforcement agencies without a gate keeper, checks or balances being put in place, without the traditional type of due process being afforded to people before they are investigated. >> the administration shouldn't be able to use drones to target terrorists off of american soil? >> i am not. what i'm saying, american citizens have a constitutional right not to have their life taken on the own soil without due process being afforded to them. >> and no joint attacks on our bank accounts. >> you think the drones will hit the banks? >> my bank account? a hell fire missile on my bank account. >> the reason the discussion comes up, there is this pretension as though constitutional liberties everyone assumed they had are not talked about in robust
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fashion, your life, liberty, property, are at threat. >> the international element, people dragged to the hague? what is the international concern? >> because if you look at the way this puzzle is pieced together, this information can be shared with international agencies that can peer into your financial life, and the concern is, when you as an american citizen enter into a private transaction, you would think your information wouldn't be shared world round, and your information is being exposed in ways you may not perceive. without knowledge, consent, due process. >> texas attorney general greg abbott, thank you, sir. we appreciate it, as always. up next on "kudlow" how far will the left leaning, union loving nlrb go to restrict free markets and free business? we'll stop them in a moment and show you how to stop it next up on the "kudlow report." please stay with us. yfish,
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thecall it call it the fruit of the poison tree. a federal appeals court recently nullified president obama's recess appointments for the national labor relations board. the appointments are illegal. the white house is appealing that decision to the supreme court. but meanwhile, hundreds of decisions, mostly union friendly and anti free market decisions have nullified that whole story, if there are illegal appointees,
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then there should be illegal restrictions. u.s. chamber of commerce, fighting to get decisions overturned. joining us now is rachel brand, steve mcmahon, jim petrekoukas and don lufkin. i'm a simple minded guy. that's my point of view. let's start with the ambush election rule. which is so totally pro union, it's off the charts. >> well, the ambush election rule or the cookie election rule as people call it stacks it against the employers in the union process by dras maikly decreasing amount of time that employers have when employees say they want to organize. it can take the time it wants getting ready, organizing and spring an announcement on employers on a friday afternoon and the employer has to scramble in a short period of time of time, and that overturns the
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longstanding rules about how elections were conducted. >> let me go back. let me challenge my own premise. get your take on this, and open it up to questions. do you agree or does the logic work that if these were illegal appointments, because there was no -- no proper senate recess, whatever they do is illegal. the whole thing should be nullified is that your point of view? the chamber's point? >> that's clearly the case. the law says that the board, a five-member board, has to have three members to have a quorum, can't conduct any business without a quorum. the statute says that, the supreme court said that exact thing a couple of years ago. so if the three appointments the president made are unconstitutional, the board can't do anything. so all of the decisions, and nearly 1,000 of them that issued with appointees are invalid. >> don. >> how about some litigation to remove the influence of unions
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in politics? if you represent a corporation, you have to register as a lobbyist and you are vilified. if you represent a union, you get to sleep in the lincoln bedroom. litigate that, please. >> i'll take that back. what the chamber has a big policy program on labor and employment issues, that particular issue i haven't looked at. >> rachel, isn't it -- it happens to have sprung up because of labor relations board. isn't this something brewing, the constitutional issue that has to do with recess appointments that presidents have made for a long time. the party has routinely objected to and two or three circuits with a different view and going to the supreme court. essentially what's going on here? >> well, the d.c. circuit's opinion, the most recent decision about the appointments a very broad decision. reasoning different than other court decisions that you refer to, and the supreme court will take this case, because the
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supreme court gets to decide what cases it likes to take and it likes to take a case where there is a conflict amongst the court. >> what's specially going on, a president who is hoping bypass congress in a second term, through regulation, appointments like these, and it's not quite panning out the way he had hoped. >> you know, one of these regulations, rachel, just one minute ago, employers still have to withhold paychecks for union members. the paycheck protection thing is back on the books. i didn't know that until i read the notes. that is unbelievable, rachel. totally unbelievable. union members can't get out of that. employees can't get out of that. >> the board issued a decision that employees have to deduct union dues even after the collective bargaining agreement expired. the employer is forced to keep taking money and give it to their union and upset decades
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old precedent. >> that is incredible and if the appointees are illegal, then the regulations are illegal. and somebody has to stand up for free enterprise and free markets. that's what this is about. treating business awfully. rachel brand, steve, jim and don. that's it for tonight's show. thank you for watching. more capitalism tomorrow evening. i'm larry kudlow. i know what you're thinking...